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Why Yesterday's IBM v. Microsoft Non-Compete Suit is Inane


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2/13/2018
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Yesterday, IBM sued Microsoft for poaching its chief diversity officer, Lindsay-Rae McIntyre, in violation of her non-compete with IBM. More specifically, IBM stated that

"McIntyre was at the center of highly confidential and competitively sensitive information that has fueled IBM’s success in these areas ...  "While we understand Microsoft’s need to deal with mounting criticism of its record on diversity, IBM intends to fully enforce Ms. McIntyre's non-compete agreement to protect our competitive information."

The lawsuit is inane. On multiple levels.

Why IBM's Lawsuit Seeking to Enforce McIntyre's Non-Compete is Beyond Stupid

  • The Non-Compete Lasts Only One (1) Year. First, and as a threshold matter, Ms. McIntyre's non-compete, by its own terms, is only set to last for one year. By the time either side to this case will receive a judicial determination as to whether this non-compete is enforceable or not, a good chunk of that year will certainly be gone, rendering moot most, if not all, any meaningful relief that is ultimately awarded. In other words, there really is no great upside to either side if they "win."
  • How Confidential, or Proprietary Could McIntyre's Knowledge Really Be? In all seriousness, how on earth could knowledge about one company's diversity practices be used to (unfairly) compete with another company? After all, we're not talking about trade secrets that are used to gain an advantage with products in the marketplace. So, forgive me for being so blunt, but why would IBM care if she used her knowledge to help Microsoft become more diverse and inclusive? How does that even remotely hurt IBM?
  • How Much Money Was McIntyre Set to Earn at Microsoft Anyway? Third, it is rather safe to assume that both Microsoft and IBM have each spent hundreds of thousands of dollars fighting this out - and we're only in Week 1 of the litigation. Assuming, for example, that Microsoft deems McIntyre sufficiently valuable, and therefore decided, in lieu of litigating this case, to simply pay McIntyre to stay "on ice" for a year, wouldn't that be far more cost-effective than continuing to fight?

Alternatively, wouldn't it make more economic sense for both parties to reach some middle ground - up front - than continuing to litigate this case until kingdom come?

Why Both Companies Will (Probably) Continue to Fight it Out Anyway

To be sure, there are "bet the business" cases, and other instances where a case has to be litigated through to the bitter end. But those are the exception rather than the rule. And, as you can certainly glean from what I set forth above, there is simply no way this case falls in that ambit.

Sadly - for all of us who participate in the judicial system - I highly doubt this case will resolve quickly - even though it should.

In truth, this is part of an overall bias I have gained over the past 20 years against some firms that have earned a reputation for this kind of conduct, particularly when it comes to litigation. In many (but certainly not all) instances, there is an ingrained, single-minded way they litigate cases - regardless of whether it makes sense from the client's perspective or not. And, from an outside viewpoint, that seems to be ruling the day in this case.



Category: Non-Compete & Employment Agreements

Jonathan Cooper
Non-Compete, Trade Secret and School Negligence Lawyer

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